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The American dollar was still under selling pressure and hit new July lows against the majority of its primary competitors. Some upbeat news from Europe coincided with the dollar’s decline. On news that the European Central Bank would debate a 50 basis point rate hike when it meets this week, the EUR/USD pair jumped to 1.0268. Additionally, in order to permit the trade in food, the European Commission decided to relax some of the restrictions against Russian banks. Finally, reports claimed that on July 21, the Russian gas giant Gazprom would resume supplying gas to the EU as scheduled. Generally speaking, recession worries have abated a little, but the situation is still bleak and optimism may soon wane.
The rise and Fall of the Dollar Prices
Price and wage setting are two indicators of more inflation persistence, according to Bank of England Governor Bailed, and as such, they would require “forceful” action. The GBP/USD exchange rate rose to 1.2045 but then fell a few pips short of the 1.2000 barrier. The unemployment rate remained at 3.8 percent, and the number of people claiming unemployment benefits dropped to -20K, making for generally encouraging employment statistics in the UK.
The dollar’s value decreased somewhat vs the CHF, as the forex currency pair fell to 0.9652. The USD/JPY pair made a small gain and ended the day at 138.19. The day saw strong gains for commodity-linked currencies, with the AUD/USD pair forex trading near 0.6900 and the USD/CAD pushing through daily lows in the 1.2870 price range. For the third day in a row, the price of gold held steady at roughly $1,710 per troy ounce. The price of WTI increased, and is at $100.60 per barrel.
Stocks experienced significant advances in the US and Europe, providing a preview of gains in their Asian equivalents. However, the US Treasury yield curve is still inverted.
The US dollar strengthened against the rupee in international markets, a lack of dollar inflows, and the central bank’s declining foreign exchange reserves are all factors contributing to this trend. After reaching a new peak on Monday, the US dollar extended its gains against the rupee in the interbank market and rose past the Rs205 mark by closing time on Tuesday.